economic regulations

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When we became an oligarchy

An oligarchy is a government run by a small group of elitists;  in our case, the very rich.  (In which case, perhaps the better term is a plutocracy.)  Today’s Supreme Court ruling was the final deciding factor.

How did we get here, in a place that Teddy Roosevelt warned us about?    money

1.  Reagan’s tax cuts.  It started under Reagan when the tax rates on the super rich were dropped tremendously.  Soon after this, we started going into great debt (unnecessary wars didn’t help any).  Infrastructure started falling apart, education was cut, opportunities started vanishing, and they took the middle class with them.  And the rich got even richer and, therefore, more powerful.

2.  The removal of regulations.  Reagan again.  From the very beginning, our economy went through periods of prosperity and crash, on the average of every seventeen years.  There was the Panic of 1819, the 1837 Crisis, the Panic of 1873, the Panic of 1893, the 1907 Banker’s Panic, and so on up to the Great Depression. Then Franklin Roosevelt put in controls and restrictions on Wall Street and banking and lo and behold, no depressions and no recessions for fifty years. Reagan comes in and removes those and bang! The S&L crisis, the 2001 recession, the 2007 Mortgage crisis, and the 2008 Bush collapse.  But more importantly, the lack of regulations produced less competition as huge businesses and banks gobbled up smaller ones and created monopolies.  This gives us great income inequality, where the vast majority of wealth in America is concentrated in the very few at a level comparable to the period before the French revolution.

3.  Gerrymandering.  This isn’t new, but it has gotten so absurd that it keeps those in power there, with hardly any challenges to incumbents.  Therefore, there is no one “stirring up the pot” and bringing in new blood to change things.  In certain districts, it is impossible for the other party to challenge the incumbent party.  This is terrible for democracy, which — like capitalism — needs competition to survive.

4.  The removal of campaign contribution limits.  With Citizen’s United and today’s McCutcheon decision, the Supreme Court has vested power in the filthiest rich at the expense of the rest of us.  You have to be daft to deny that money is power, and what these decisions do is to create the two great fictions that “corporations are people” and “money is speech.”  This means those in power now have even more means to keep themselves in power, by being able to spend unlimited, uncontrolled, and unregulated money in politics.

Because, according to the Supreme Court, if you bribe a politician quietly behind the scenes, it’s a crime.  But if you do it as a campaign contribution anonymously, it’s protected speech.

I’m sure I’ll have more to say on this latest nail in democracy’s coffin but for now I am just too angry to think.

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Capitalists when convenient

You can no longer buy a Tesla in New Jersey.

Governor Chris Christie’s bureaucracy just passed a regulation that requires all automobile companies to use franchises to sell their cars.    Tesla_Roadster_Japanese_display

If you can think of any possible reason why such a regulation is needed, please let me know.

This only affects electric car manufacturer Tesla, now prohibited from selling its vehicles in New Jersey since they sell direct.   This regulation prohibits the citizens of New Jersey from being able to shop for a legal product they may want to purchase.  The only beneficiaries of this are the gas-burning automobile manufacturers.  Hey, speaking of them, did you know that they donated tens of thousands of dollars to the Christie re-election campaign?  Pure coincidence, I am sure.

Chris Christie and his Republican friends may talk about the “free market” but clearly that only applies to their  rich friends.  (I could make a similar argument about cable companies and other monopolies that are sanctioned by governments.)

Conservative and libertarian groups who are honest and true to their ideology are outraged (as are liberal groups, of course).   The New Jersey state legislature can still try to pass legislation to redact this (assuming they can get enough votes to override Christie’s veto).

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Regulations Schmegulations

Can’t help it, I think regulations are a good thing.

I like the fact that our government regulates our food to make sure it’s not filled with e coli.  USDA-Meat-Inspection-LabelI like knowing what ingredients are in the food. I like restaurants to not have rats.  I think regulations to make sure our cars are safe are a good idea.  I like having doctors and lawyers and electricians certified by the government and subject to regulations about what they can do.  I like requiring only adults to buy alcohol and cigarettes. I like regulations about workplace safety, and prohibitions against discrimination, and housing restrictions that prevent someone from putting a pig farm next door to me.

Some people, however, think that the “regulation” is a bad word.  They will use some example where a regulation has gone too far and then say “See?  Therefore, we should get rid of them all.”

Both extremes are bad.  “No regulations” is anarchy.  “Complete regulation” is tyranny.  Usually we’re pretty good about finding a reasonable spot between the two, but anyone who says “all regulation is bad” or “all regulation is good” is deluded.

Take financial regulations.  From the time of the founding of the United States, we had a recession or financial crisis on the average of once every seventeen years.  There was the Panic of 1819, the 1837 Crisis, the Panic of 1873, the Panic of 1893, the 1907 Banker’s Panic, and so on up to the Great Depression. Then Franklin Roosevelt put in controls and restrictions on Wall Street and banking and lo and behold, no depressions and no recessions for fifty years. Reagan comes in and removes those and bang! The S&L crisis, the 2001 recession, the 2007 Mortgage crisis, and the 2008 Bush collapse.

Regulations can be good things.

So no, you won’t get me jumping on your libertarian view that all regulations are bad, any more than you’ll get me jumping on a communist view that everything must be regulated.